In 2005, just five years after its official launch, Beijing-based Red Flag Software was the second largest distributor in the world of Linux operating system and expecting its first annual profit. Based unit, Red Flag global leader in desktop computers (PC) comes with Linux and was number 4 in the installed servers. Income-based, Red Flag was fourth in the overall standings. In China, Red Flag took a little more than half of the market, and ran Linux core applications for mail system, large state enterprises and more than a million computers. The Chinese government supports Linux as an alternative to Windows, the operating system Microsoft, to avoid royalty payments to foreign firms, and the dependence on foreign technology. Despite this, the president of Red Flag Chris Zhao felt the same pressure many startups face: How Red Flag compete with a giant like Microsoft? And the fact that competitive advantage can bring to bear Zhao against seasoned veteran Linux, like Red Hat, an American software company, which has just announced its plans to invest to capture market share in China? Zhao concerned that public support will evaporate if the Red Flag performed poorly. "Hide
by Felix Oberholzer-Gee, Tarun Khanna, David Lane, Elizabeth A. Raabe Source: Harvard Business School 16 pages. Publication Date: October 26, 2005. Prod. #: 706428-PDF-ENG
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